Autocam Corp. v. Sebelius
| Decision Date | 17 September 2013 |
| Docket Number | No. 12–2673.,12–2673. |
| Citation | 730 F.3d 618 |
| Parties | AUTOCAM CORPORATION; Autocam Medical, LLC; John Kennedy; Paul Kennedy; John Kennedy IV; Margaret Kennedy; Thomas Kennedy, Plaintiffs–Appellants, v. Kathleen SEBELIUS, in her official capacity as Secretary of Health and Human Services; United States Department of Health and Human Services; Thomas E. Perez, in his official capacity as Secretary of Labor; United States Department of Labor; Jacob Lew, in his official capacity as Secretary of the Treasury; United States Department of the Treasury, Defendants–Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
OPINION TEXT STARTS HERE
ARGUED:Patrick T. Gillen, Fidelis Center for Law and Policy, Naples, Florida, for Appellants. Alisa B. Klein, United States Department of Justice, Washington, D.C., for Appellees. ON BRIEF:Patrick T. Gillen, Fidelis Center for Law and Policy, Naples, Florida, Jason C. Miller, Miller Johnson, Grand Rapids, Michigan, for Appellants. Alisa B. Klein, Mark B. Stern, United States Department of Justice, Washington, D.C., for Appellees. Jay Alan Sekulow, American Center for Law & Justice, Washington, D.C., Deborah J. Dewart, Liberty, Life and Law Foundation, Swansboro, North Carolina, Edward L. Metzger III, Adams, Stepner, Woltermann & Dusing, PLLC, Covington, Kentucky, Catherine W. Short, Life Legal Defense Foundation, Ojai, California, Nikolas T. Nikas, Dorinda C. Bordlee, Bioethics Defense Fund, Scottsdale, Arizona, Mailee R. Smith, Americans United for Life, Washington, D.C., B. Eric Restuccia, Office of the Michigan Attorney General, Lansing, Michigan, Frederick D. Nelson, Office of the Ohio Attorney General, Columbus, Ohio, Kimberlee Wood Colby, Center for Law and Religious Freedom Christian Legal Society, Springfield, Virginia, Noel J. Francisco, Jones Day, Washington, D.C., Robb S. Krueger, Kreis, Enderle, Hudgins & Borsos, P.C., Kalamazoo, Michigan, Lisa S. Blatt, Arnold & Porter LLP, Washington, D.C., Bruce H. Schneider, Stroock & Stroock & Lavan LLP, New York, New York, Martha Jane Perkins, National Health Law Program, Carrboro, North Carolina, Charles E. Davidow, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, D.C., Brigitte Amiri, American Civil Liberties Union Foundation, New York, New York, Daniel Mach, American Civil Liberties Union Foundation, Washington, D.C., Michael J. Steinberg, Miriam Aukerman, American Civil Liberties Union Fund of Michigan, Detroit, Michigan, Ayesha N. Khan, Gregory Lipper, Caitlin E. O'Connell, American United for Separation of Church and State, Washington, D.C., for Amici Curiae.
Before: GIBBONS and STRANCH, Circuit Judges; HOOD, District Judge. *
Autocam Corporation and Autocam Medical, LLC (collectively, “Autocam”) are for-profit, secular corporations engaged in high-volume manufacturing for the automotive and medical industries. The companies are owned and controlled by members of the Kennedy family, all of whom are practicing Roman Catholics. Pursuant to regulations implementing the Patient Protection and Affordable Care Act of 2010 (“ACA”), Pub.L. No. 111–148, 124 Stat. 119, Autocam's health care plan is required to cover, without cost-sharing, “[a]ll Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling” for female employees enrolled in its health plan. See Health Res. & Servs. Admin, Women's Preventive Services: Required Health Plan Coverage Guidelines, http:// www. hrsa. gov/ womens guidelines (last visited August 5, 2013); 77 Fed.Reg. 8725–01 (Feb. 15, 2012) (codified at 45 C.F.R. § 147.130(a)(1)(iv)).
Autocam and the Kennedys claim that compliance with this directive—popularly known as “the mandate”—will force them to violate the teachings of the Kennedys' church, but failure to comply with it will result in significant fines against Autocam. They sued the Cabinet departments and secretaries responsible for implementing the ACA's mandatory coverage requirements on a variety of constitutional, statutory, and procedural grounds, and moved for a preliminary injunction that would relieve Autocam of its duty to provide the disputed coverage to its employees. The district court denied the motion. On appeal, Autocam and the Kennedys argue that they have a strong likelihood of success on their claim that the mandate violates the Religious Freedom Restoration Act (“RFRA”), 42 U.S.C. §§ 2000bb. Our sister circuits that have considered whether for-profit corporations may be exempted from compliance with the mandate under RFRA have split on the proper answer to the question. 1 For the reasons that follow, we dismiss the claims of the individual plaintiffs on standing grounds and otherwise affirm the judgment of the district court.
The Kennedy family members named in the complaint own “a controlling interest” in the two corporate entities that comprise Autocam. John Kennedy serves as Autocam's CEO and president and is primarily responsible for “setting ... policies governing the conduct of all phases” of Autocam's business. The two companies have 1,500 employees in fourteen facilities worldwide, including 661 employees in the United States. The Kennedys “believe that they are called to live out the teachings of Christ in their daily activity and witness to the truth of the Gospel by treating others in a manner that reflects their commitment to human dignity,” which includes their business dealings. They characterize Autocam as a for-profit, secular corporation and “the business form through which [they] endeavor to live their vocation as Christians in the world.” One of the ways that the Kennedys believe they manifest this commitment is by providing their employees with health coverage. Autocam is “self-insured and provide[s] health benefits to [its] employees by virtue of a jointly administered benefits plan which features a group insurance plan used to provide benefits to full-time employees.”
The Kennedys claim that the same religious beliefs that motivate them to provide Autocam employees with health coverage also limit the scope of the coverage they are able to provide. They accept their church's teaching that artificial contraception and sterilization are immoral. They also believe that they become morally responsible for the use of contraception by others when they “directly pay for the purchase of drugs and services ... in violation of [their] beliefs.” This teaching is sometimes referred to by the plaintiffs as “material cooperation.” In applying these teachings to their ownership and operation of Autocam, the Kennedys believe that they cannot direct their closely held company's health insurance plan to “provide, fund, or participate in health care insurance that covers artificial contraception, including abortifacient contraception, sterilization, and related education and counseling.” The plaintiffs “do not seek to control what an employee or his or her dependants do with the wages and healthcare dollars” they provide because they do not consider themselves morally responsible for the choices of employees in the way plaintiffs believe they are responsible when they provide insurance coverage for services they find morally objectionable.
If required to comply with the mandate, Autocam's health plan would have “to directly pay for the purchase of drugs and services” that the Kennedys find objectionable. The Kennedys believe that compliance with this law would constitute impermissible “material cooperation.” But failure to comply with the mandate would lead to serious financial consequences. The ACA's primary enforcement mechanism for bringing employers into compliance with the mandate is a “tax” on the employer when its health plan fails to meet the requirements of the ACA. 26 U.S.C. § 4980D(a). The amount of additional “tax” is “$100 for each day in the noncompliance period with respect to each individual to whom such failure relates.” Id. § 4980D(b)(1). If it chooses not to comply with the mandate, Autocam estimates that it will be assessed fines of $19 million per year. The Kennedys also allege that directing Autocam to drop health care coverage entirely is not an option because (1) they believe their faith obligates them to provide health benefits in a manner consistent with their beliefs; and (2) Autocam would still face substantial financial penalties if it chose to drop coverage entirely because it is required to provide health insurance to its employees due to the company's size. Id.§ 4980H.
On the government's motion, we asked for briefing on a variety of jurisdictional questions. These questions fell into roughly two categories: the Article III standing of the plaintiffs to assert RFRA claims, and the effect of the Anti–Injunction Act, 26 U.S.C. § 7421(a) (“AIA”), on this suit. After a review of these issues, we agree with the parties that the AIA is not an obstacle to exercising jurisdiction and that Autocam has Article III standing to assert RFRA claims. As to the Kennedys, we agree with the government that they lack standing as individuals to bring RFRA claims arising from an obligation on their closely-held corporation. Accordingly, their claims must be dismissed for lack of subject-matter jurisdiction.
The plaintiffs and the government agree that the AIA does not preclude the plaintiffs from seeking to enjoin the ACA mandate at this time. That shared conclusion is sound. The AIA provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.” 26 U.S.C. § 7421(a). This means parties seeking to challenge the “assessment or collection of [a] tax” must pay the tax and sue for a refund afterwards. Nat'l Fed'n of Indep. Bus. v. Sebelius, ––– U.S. ––––, 132 S.Ct. 2566, 2582, 183 L.Ed.2d 450 (2012). This suit is not...
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